Massive monetary policy stimulus has rekindled growth in developed economies since the deep recession that followed the collapse of Lehman Brothers in 2008; but what the IMF calls the “handover” to a more sustainable recovery – without the extra prop of ultra-low borrowing costs – has so far failed to materialise.

Meanwhile, the cheap money created to rescue the developed economies has flooded out into emerging markets, inflating asset bubbles, and encouraging companies and governments to take advantage of unusually low borrowing costs and load up on debt.

“Balance sheets have become stretched thinner in many emerging market companies and banks. These firms have become more susceptible to financial stress,” the IMF says.

Meanwhile, the failure to patch up the international financial system after the last crash, by ensuring that banks in emerging markets hold enough capital, and constraining risky borrowing, for example, means that a new Lehman Brothers-type shock could spark another global panic.

“Shocks may originate in advanced or emerging markets and, combined with unaddressed system vulnerabilities, could lead to a global asset market disruption and a sudden drying up of market liquidity in many asset classes,” the IMF says, warning that some markets appear to be “brittle”.

So as the US Federal Reserve lays the groundwork for a return to peacetime interest rates, from the emergency levels of the past seven years, financial markets face what the IMF calls an “unprecedented adjustment”; and the world looks woefully underprepared.

The IMF’s warning echoes a chorus of others. The Bank of England’s chief economist, Andy Haldane,has argued that the world is entering the latest episode of a “three-part crisis trilogy”. Unctad, the UN’s trade and development arm, would like to see advanced economies boost public spending to offset the downturn in emerging economies. The Bank for International Settlements believes interest rates have been too low for too long, encouraging too much risk-taking in financial markets. All of them fear that the global financial system is primed for a crisis.

The IMF has not given up hope of what it calls a “successful normalisation” – it lays out a series of conditions that would need to be met, from a successful rebalancing of growth in China, to “safeguarding against market illiquidity” in financial markets.

Yet the failure of the world’s policymakers to get to grips with the shortcomings of the international financial system over the past seven years, despite the long shadow cast by Lehman and its aftermath, suggests that any measures enacted now are likely to be too little, too late. The message many may take home from Lima is, “batten down the hatches”.

Sunday, November 8, 2015

Here’s a table of the top 50 jurisdictions in this year’s rankings with Switzerland (once again) topping the list.

Like clockwork, the Swiss come in first thanks to its tough bank secrecy laws and push to build “market share in some of the world’s more vulnerable and badly governed developing countries, which will therefore continue to suffer Swiss-sanctioned élite looting.”

Problems with the USA and the United Kingdom

Surprisingly enough, the USA moved up three spots in this year’s rankings, making it to the podium and receiving a bronze medal for its secretive financial system and lack of reciprocity.

According to the Tax Justice Network, despite the US confronting American tax evaders head-on via the implementation of FATCA and likeminded regulations, it fails when it comes to providing other jurisdictions with information on their citizens’ accounts in the US.

About the US the organization says, “It is more of a cause for concern than any other individual country – because of both the size of its offshore sector, and also its rather recalcitrant attitude to international co-operation and reform.”

John Christensen, Tax Justice Network’s Executive Director, adds, “The United States dealt global financial secrecy a devastating blow by forcing strongholds such as Switzerland to open up. But after this blistering start in efforts to protect itself, it is backsliding by failing to provide information in the other direction: refusing to participate directly in global transparency initiatives such as the multilateral automatic information exchange and, inexcusably, lobbying to block public country by country corporate reporting. The USA must finally overcome its historically rooted opposition to reasonable tax data sharing with its trade and investment partners.”

The United Kingdom does not fare much better.

In fact, if the Financial Secrecy Index combined the UK with its Overseas Territories or Crown Dependencies such as the Cayman Islands, British Virgin Islands and Bermuda, it would go home with a shiny gold medal. Even though the British government has pushed automatic exchange of information onto its territories, it “has failed to force them to create public registries of beneficial ownership, despite having the power to do so.”

Singapore and Hong Kong — No Interest in Common Reporting Standard

Both Hong Kong and Singapore earn high rankings as a result of their dislike for CRS and any sort of exchange of information.

Hong Kong, for instance, “hasn’t signed the multilateral agreement to initiate automatic information exchange via the CRS; it has a problematic record on corporate transparency; and unlike European countries it appears to have little appetite for country-by-country reporting or for creating registers of beneficial ownership.”

Luxembourg: Light at the End of the Tunnel?

Luxembourg, referred to as “Death Star of financial secrecy inside Europe” by the organization, improved its ranking in 2015, dropping four spots to number six.

What explains this improvement?

Tax Justice Network says it’s a combination of “the evolving international climate on transparency… with high-profile global scandals that have cast the tax haven in a highly negative light. These changes also coincide with the departure of Prime Minister Jean-Claude Juncker, arguably the most important architect of the secretive modern tax haven. “

Follow by Email

Subscribe To

Resources

Workshop Schedule

For Existing Clients-Trust ImplementationWe hope you can make it by calling and entering the access code:Saturday, May 12, 2018 at 11:00am ETPhone. 712-775-7035Code. 908702# Mute/Un-mute. *6Information and People for Diligent Outcomes

Legal Notice

IRS Circular 230 Disclaimer:

To ensure compliance with requirements imposed by the IRS, please note that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code; or (ii) promoting, marketing or recommending to another party any transaction or tax-related matter addressed herein.

OIW TRUST ASSOCIATES LLC “OIW” ARE NOT ATTORNEYS, CPA's or PROFESSIONAL INVESTMENT ADVISORS.

“OIW” Invest Heavily In Legal Compliance Review. All Qualified Spendthrift Trust And Unregulated Family Private Trust Company Instruments Are Independently Reviewed At Least Annually For Compliance With Wyoming Statutes And Relative IRA Notices And Letter Rulings, By A Preeminent Wyoming Law Firm, With Attorneys Who Are Fellows Of The American College Of Trust And Estate Counsel.

“OIW” consults a network of independent and accredited CPA’s, and tax attorney’s who collaborate With “OIW” to provide professional accounting information and services to Clients who need or desire professional legal or accounting services. “OIW” has belief and relies on information from these sources to be reliable.

OIW Trust Associates LLC “OIW” (the “author” and “publisher”) gathers, acquires, develops, aggregates and analyzes, legal, corporate, investment opportunities, economic and political intelligence and information (the "intelligence" or "information") which it distributes and broadcasts in its web sites, blogs, briefings and reports, solely for education and general informative purposes, and are subject to change at any time without notice. The intelligence and information is by no means intended to be tax, legal or investment advice and is not to be used or relied upon as tax, legal or investment advice, and is not provided or published for such purposes whatsoever.All contents of briefings, reports, publications, presentations and other of the information including re-prints and re-broadcasts in written, electronic, audio or any other media “the information” are copyright 2012-2014 by “OIW”.

All Rights Reserved. Reproducing any part of "the information" is prohibited without the express written consent of OIW TRUST ASSOCIATES LLC. Protected by U.S. Copyright Law Copyright Law {Title 17 U.S.C. Section 101 et seq., Title 18 U.S.C. Section 2319}.